Finding Incrementality: It Starts With Opportunity
Listen to your FOMO! Incremental growth starts with not missing new opportunities
Retail advertisers know that new growth in crowded markets requires competing for shoppers. 51% of respondents to a January ecommerce priorities study identify “Competing with larger ecommerce players or marketplaces” as a primary challenge for 2024. Retail advertisers need methods for cutting through the noise in order to win incremental share or even to maintain the share they have. That means finding different channels to reach new shoppers or additional ways of influencing shoppers.
The challenge and the opportunity for retailers is clear, but for many the solution to incremental sales is not. In our first post of this series we explore the definition of incrementality and consider approaches to measurement. We suggest marketers dissect the component parts of retail advertising and focus on two groups of outcomes that can be measured, Incremental Opportunity (tapping new sources, increasing impressions and finding new shoppers) and Incremental Performance (gaining share, efficiency of budgets and performance to campaign goals). Framing the challenge of incrementality in two parts, new shoppers and better performance, is the first step to make this larger existential challenge more approachable for retailers.
This is an update on our ecommerce incrementality series. It’s a playbook of sorts, with recommendations for how to gain incremental opportunity by:
– incentivizing better or even exclusive access to shopper traffic
– finding millions of new young shoppers as future loyal customers
– gaining up to 25% more share of shopper impressions
– finding traffic that delivers up to 2X the new customer ratio than other channels
1. Look Outside the Walls
Nearly all retail advertisers allocate budgets in Google, Amazon and Meta properties. In-fact studies show that 60% (or more) of all digital advertising spend occurs in these types of walled-gardens. Sure, it’s necessary to compete in the biggest markets, but it’s also smart to diversify your advertising risk across media channels, especially with the challenge of cookie deprecation on the horizon. Recent studies suggest that US marketer spend is increasing on the open web (the space outside the walled gardens) – and in the UK 7 in 10 marketers expect to increase spend on the open web even more in 2024.
So, where do you focus your attention and prioritize ad budgets in the open web? There are a number of opportunities across an array of channels – commerce content, product display ads, social influence, retail marketplace sites, search and more. We cover more details about incremental opportunities in all of these channels further down under ‘Be Present At Every Touchpoint’.
But, while it’s important to have a presence in multiple forms of shopper traffic, it’s difficult (maybe next to impossible) for most brands and retailers to directly manage the variety of relationships necessary to create incremental opportunity on each channel. That’s why retailers need to partner with an experienced performance marketing provider – a partner with relationships designed to expand commerce promotion.
1.5bn new shopper clicks annually – Connexity has spent decades building a network of close publisher and content provider relationships. Our ability to aggregate premium retailer offers, to develop publisher tool integrations, and to dynamically optimize traffic pricing fuels the development of commerce promotion across an array of channels. In 2023 those partnerships generated over 1.5 billion incremental shopper clicks to product offers.
2. Incentivize Content Promotion
With retailers spending more on the open web, content publishers are increasingly focusing their revenue strategies on the creation of Commerce Content, publisher-generated editorial content about products. About 40% of publishers in a 2023 ‘State of Commerce Content’ study report that commerce content is now greater than 20% of their revenue mix. And there is no sign of slowing as 88% of publishers report their commerce content output grew or remained steady over the past year.
Today commerce content publisher strategies are more advanced. They are increasingly working to optimize content monetization. Instead of relying only on affiliate networks, publishers are also partnering with performance marketing providers. They’re leveraging both CPA and CPC budgets and demanding premium retailer rates for access to their highest converting shopper traffic. Many publishers are even developing content specifically to promote retailers that have the budget to pay elevated rates.
Smart retailers are adjusting their budget strategies to take advantage of these opportunities. Enabling CPC budget or committing to a premium CPA rate can incentivize publishers to develop content exclusively showcasing your offers. It’s a great way to generate evergreen promotion capturing the attention of shoppers inspired by the content they’re interested in reading.
55% YOY growth in commerce content links – Connexity is committed to growing new opportunities for retailers in commerce content. Within Skimlinks, Connexity operates the largest commerce content network in the world. We offer data, tech and tools that enable publishers to streamline product promotion in their content, increasing the number of monetizable links at a rate of 55% growth year-over-year.
3. Be Present at Every Touchpoint
Now, this isn’t a post exploring the path to purchase, but retailers do need to consider that consumers are not all the same. The way we discover products, make decisions and are inspired to buy differs across our own individual shopping journeys. Maybe you discover products when reading blogs or content about your favorite topics or hobbies. Some of us are influenced to make a purchase by seeing content from a favorite social creator. Others are deal shoppers who research as many buying options as possible before pulling the trigger.
The point is, there are a number of ways to motivate a shopper and not being present at the major touchpoints in their journey might mean you’ve missed an incremental opportunity to gain share of voice, to make a conversion or even to win a new customer.
Discovery
In decades past television was the largest medium for consumers to learn about new products. As our collective attention to news, entertainment and editorial content continues to shift online, the website and app equivalent destinations have become an effective means of helping potential shoppers discover your product offers. Placing offers in broad content sources, either directly or programmatically, is a giant business – nearly $160 billion estimated for the US alone in 2024.
Here the name of the game is scaled targeting in native advertising – ads in content with massive built-in audiences of loyal visitors. While it’s not necessarily contextual targeting, it’s the opportunity to find interested audiences who already spend time in content and may be in a mode open to discovering your offer. For effective native advertising, many traffic sources are needed to find consumers with matching product intents or where you can reach existing customers to retarget with new offers. You also need a trusted partner with which to share data for developing target audiences.
The last recommendation here is to work with an ad platform where the relationship to the content publisher is direct. Bidding and winning access to placements through direct partnerships will be more efficient than accessing placements through the open exchanges. But we’ll save more on that for a later post where we can dig into the second part of incrementality – incremental performance.
88% of Internet Users – As a Taboola company, Connexity helps retailers take advantage of dynamic product ads in native advertising to premium content sources on the Taboola network – a platform reaching 88% of all US Internet users.
Influence
Influence marketing on social media is increasingly becoming a larger source of retail sales conversions. In 2022 US social commerce sales were estimated to be nearly $1 trillion. In 2023 Instagram alone reported having 43 million US social commerce buyers. Being inspired to purchase by social content is especially the case among younger consumers where 43% of Gen Z today report they would buy a product based on an influencer recommendation.
The best part about getting into social marketing is that you don’t need a high-profile celebrity ambassador. There are plenty of ways to access millions of consumers through many lesser-known creators that specialize in content aligning with your product focus and ethos. Up-and-coming creators are often hungry to build a business and they focus on generating authentic content that also performs for the retailer’s sales goals vs focusing on their own recognition and vanity metrics.
2x greater ratio of new customers – Connexity’s own influence marketing network ShopYourLikes (SYL) delivers significant incrementality in the form of new customer acquisition. We’ve curated communities of emerging creators focused on developing authentic content that drives retail performance. With content inspiring millions of loyal followers, SYL creators deliver conversions by new customers at a rate 2x higher than other channels.
Consideration
Consumers are more savvy these days. We spend more time considering a purchase before making the commitment to buy. We check for the best price and look for deals or rebates. 89% of us consult review and comparison sites before making a purchase and some 79% of us say user-generated reviews are even more impactful. With so much pre-purchase time spent in this space, having a strong presence here can make the difference between a conversion and no conversion. Like any other content developer, comparison shopping and review sites also optimize monetization. They’re more likely to promote your products when premium CPA or CPC rates are offered and your product data is integrated into a feed they can automate.
Buy Now Pay Later (BNPL) is another growing option in the consideration touchpoint. BNPL enables shoppers to make purchases and pay for them over time in short-term financing. The financing model makes BNPL an attractive prospect for many – especially younger shoppers (⅓ of Gen Z and Millenials now use BNPL). The largest BNPL platforms (Afterpay/Clearpay, Klarna & Affirm) are developing in-app shopping marketplaces where product offers are presented to users who are managing payments. These are incremental opportunities retailers should be availing in an all new and growing marketplace.
11+ million new users are expected to try BNPL in 2024 – Connexity is a preferred marketing partner for Afterpay, Affirm and Klarna. BNPL platforms use Connexity to develop product showcases and we enable retailers to gain share of voice with competitive bidding. Running product ads through Connexity enables retailers to be prioritized in BNPL placements over competitors and to even get exclusive access to newer opportunities.
Search
Product search can be a starting point for some. In fact, 44% of consumers in a Klarna Insights study say that ecommerce purchases start with search engines. But search is also associated with lower funnel shopping activity – activity where shoppers are searching for an offer, seeking the best outlet for making a purchase. With both an opportunity to capture consumers early in the process and to impact decisions close to the purchase itself, product search is a highly competitive arena. As such, it follows that incremental growth in this high-intent channel requires actively competing for every impression.
Many brands and retailers run product listing ad (PLA) campaigns (either directly or through an agency) on the major shopping search platforms, Google, Microsoft (Bing) and Yahoo. When also working with a Comparison Shopping Service partner, like Connexity, secondary or even tertiary campaigns can be run. These parallel campaigns secure incremental placements, placements that don’t cannibalize direct campaign efforts.
25% incremental share of impressions – With decades of experience in product search development, Connexity’s bidding algorithms optimize outcomes for retail partner campaigns. For retailers working with Connexity in search we win our merchant partners on average up to 25% incremental share of product search impressions.
In Conclusion
New sales and new customers from unduplicated spend is likely how you think of incrementality. But the first step in achieving this goal is to find new opportunities to reach and influence shoppers. As we’ve shown, there are a number of ways to find incremental exposure and to prioritize your offers in those opportunities.
There is a whole world of ecommerce opportunities outside of the big walled-garden ad platforms. Don’t feel daunted by the scale and the prospect of testing your budget across an array of possibilities to find just the right sources that will deliver on your goals. Work with a performance marketing partner that has direct relationships with thousands of channels and the experience necessary to quickly and efficiently optimize your campaign to scale in the open web.
Think of how your budget and performance goals translate to a CPA or CPC rate. Rates are a tool you can use to open incremental opportunities in content. Commerce content is growing as a driver of retail sales. Quality shopper traffic in these content sources is available at the right price. Partner with a marketing platform that tracks the performance of every content placement – one that can incentivize content publishers to generate new content or to prioritize promotion in the best content.
Be where shoppers are inspired and motivated to buy. There are a variety of paths we as consumers take when making an online purchase. You need to be present at key touch points along these journeys. That might take the difficult task of aligning different teams and disciplines in your organization around a singular strategic goal. But the payoff can be a campaign partnership that works across many channels to deliver greater reach, greater share, new customers and exposure in new emerging markets.
Ultimately the actions you take as a marketer can determine whether you win new opportunities to motivate shoppers or whether you miss out and allow competitors to take additional share of voice and share of market. Take the steps necessary today to win yourself incremental opportunities.
